Posts tagged ‘lme’

With the London Metal Exchange’s ferrous scrap futures contract clearing a record 500,000 metric tonnes last month, we take a closer look at market fundamentals driving up both physical and forward prices for obsolete scrap in recent weeks.

Another year, another London Bullion Market Association conference, and this year was full of what HSBC senior analyst James Steel described as “restrained optimism.” A similar description was given of the recent Denver Gold conference in Colorado Springs, where one fund manager summed the mood up as “veiled optimism.” But this didn’t stop an air of positivity buzzing on the sidelines of both events, with the mood jubilant, especially in Singapore this week. At least at face value.

The bullion market was awash with rumors September 30 relating to the possible winner of the recent request for proposal by trade body the London Bullion Market Association, with Autilla a standout name as a possible contender to be awarded the contract to increase market transparency.

One source close to the situation said that the tech company appeared to be in a strong position to take the RFP and start trade reporting, among other things, in a bid to modernize the London market.

The EU referendum vote and the shock decision by 52% of the UK’s population to leave caused immediate shock waves throughout global financial markets: European stocks, the British pound, euro and global share prices all plummeted in the immediate aftermath, whilst safe-haven assets such as gold and the dollar rocketed up. Yet the base metals complex seemed to register only a small bump from the event, recovered quickly and is now higher than it was before the vote. Why is this?

Could India’s physical gold market, which remained at a near standstill on continued industrial action this week, be set to reopen? That is the understanding of at least some senior level sources this week in the country.

Last month we noted that China’s refined nickel imports increased a staggering 250% in June to 38,545 mt from 11,014 mt in June 2014, and stated that China may well continue to increase refined nickel imports over the rest of 2015. This trend was confirmed in July, with China customs data showing the country imported 46,362 mt of refined nickel in July, up 20% on month and up 162% on year from 17,666 mt in July 2014.

In July, base metals faced two dominant headwinds in the form of the Greek debt crisis and the China stock market crash that saw metals test fresh multi-year lows on the London Metal Exchange. This led to a number of investment banks adjusting their short-term and long-term price forecasts as they focused on the likely impact of the rebalancing of the Chinese economy and its projected slower growth — what China’s Premier Li Keqiang has coined the ‘new normal.’

China’s imports of refined nickel increased by a staggering 250% in June to 38,545 mt compared to 11,014 mt in June 2014. Quarter on quarter, China’s refined nickel imports increased by 236% in Q2 to 79,911 mt from 23,813 mt in Q1 2015. If this upward trend continues, China could import over 207,000 mt of refined nickel this year — a potential increase of 60% on last year’s total of 129,980 mt.